Debt collection is a suitable manner in which outstanding amounts can be recovered when dealing with bad taxpayers. In Italy, as in any other countries, one has the possibility of running into a company or individual failing to comply with their financial obligations which is why debt collection proceedings have been put in place in order to facilitate the recovery of any financial claims. There are two phases to the debt collection procedure in Italy: the first one is the extrajudicial phase, which is also known as the amicable debt recovery procedure, and the second one is the judicial phase which implies going to trial before an Italian court of justice. An amicable settlement is always preferred to the judicial phase because it is less time and money consuming.
The suitable manner for collecting the due amount will have to do with multiple issues, concerning the status of the debtor, whether a natural or legal person and, in the latter scenario, whether or not it is undergoing liquidation or bankruptcy.
The creditor can choose work with a debt collection agency or a debt collection lawyers, such as the experts from our team. Again, the choice can depend on the particularities of the case and whether or not there an attachment is placed on the assets of the debtor, (a situation in which it is preferable to work with a lawyer).
Our team of debt collection specialists in Italy have experience in both extrajudicial recoveries as well as the enforcement of court decisions for the attachment of assets. Our services include complete assistance for debt collection in Italy and we can assist creditors from outside of the country who are interested in collecting amounts from local debtors.
Amicable debt recovery in Italy
Amicable debt recovery in Italy often implies recurring to the services of debt collection agencies. The standard procedure in amicable debt collection procedures begins by demanding the debtor to pay the outstanding amount. It is very important for the demand to be made both in written and by telephone. If the creditor receives no answer from the debtor, they can request the assistance of Italian lawyers who will draft an injunction letter. The letter will act as an out-of-court notice which informs the debtor they must pay the outstanding amount. The letter must contain:
- the principal amount owed,
- the interest,
- the late interest,
- the legal fees.
The debtor is also informed the amount must be paid within 7 or 10 days from receiving the letter.
In summary, an extrajudicial debt recovery process will include the following stages:
- Step one: collect the necessary information on the nature of the payment, existing contracts, invoices, etc.
- Step two: our team will prepare the initial demand or reminder letter in which we set out a pre-determined timeframe for the payment.
- Step three: send out the second letter demanding payment that also includes a formal notice for the commencement of the legal procedures in the event of noncompliance.
- Step four: in the event in which the debtor does not respond, our team will take the case to court.
- Step five: oversee the enforcement procedure that will include the court-ordered collection of debt by attaching the debtor’s assets.
If the debtor is ready to make the due payment after the fourth step, our agents will handle the payment process and the payment installments if such agreed. In some case, we can decide on drawing up a binding agreement for the payment of the debt.
When the negotiation with the debtor fails or if he is not responding to the reminders and the notifications, then the creditor can, together with our team of debt collection lawyers in Italy, initiate the judicial phase as described below.
Judicial debt recovery proceedings in Italy
If the owned amount could not be recovered through an amicable procedure, the second step will be to initiate legal proceedings against the debtor. All legal actions in case of debt collection are carried out by an Italian court of justice. Judicial debt collection procedures are usually handled by an Italian attorney who will submit all the relevant documents and file a petition with the court. After a few days, the court will issue an order for the debtor to pay. The order has a 40-day validity period. If the debtor does not pay, they will be issued with an enforceable decree for the execution of movable or immovable assets, such as real estate property, in order to recover the amount owed.
The enforcement of a court decision in Italy is a step that can be assisted by one of our lawyers. In practice, this is a step that takes place with the supervision of the bailiff, who with see that the attachment of the assets takes place within 90 days following the date on which the enforcement order was served. It is important to note that the attachment cannot commence before this period and that it has a statute of limitations and it can lapse. Legal representation is required during this stage and our team of debt collection lawyers in Italy can assist creditors.
The main issues that should be taken into consideration when discussing the attachment of the assets include the following:
- the procedure: the procedure starts when the enforceable title is served to the debtor according to the Code of Civil Procedure.
- the conditions for commencement: the mandatory and sufficient condition is for having an enforceable title that contains the fixed amount that is due.
- the types of assets that can be seized: movable and immovable property, shares in companies owned by the debtor.
- the validity of the measures: they are restricted to satisfying the claims that were made and no other purposes.
- the appeal against enforcement: the debtor may appeal the judgments on the enforcement procedures (against enforcement or against enforceable acts).
In some situations, enforcement is the manner in which the creditor can claim his due assets and have the guarantee that the debtor will make the due payment, as it is forced by court order. However, this is not a measure through which the creditor has unlimited access to the debtor’s assets. Our team of agents who specialize in debt collection in Italy can help creditors understand the limitations that may apply. For example, the following types of assets cannot be seized:
- Sacred objects like the ones used for practicing a recognized religion
- Household items, clothes, wedding rings, appliances, utensils (except for valuable furniture)
- Food and fuel necessary for the debtor to sustain himself
- Weapons, decorations, letters, family papers.
- State-owned property cannot be attached.
As far as the debtor’s immovable property is concerned, the real estate can be seized and then assigned to the creditor or sold. In some cases, the goods from third parties will also be repossessed.
The actual debt collection process, the limitations and the documents that need to be drawn up and presented will differ from one case to the other.
If you need legal representation in debt collection procedures you can contact our specialists in debt collection in Italy.